2017 Business Continuity Plan (BCP)
Our firm’s emergency contact persons are:
- Kevin McKenna (Branch Manager/Global Service Manager) Office Phone – (212) 813-1010, Cell phone – (917) 399-0214 email – firstname.lastname@example.org
- Robert J. Eide (Chief Executive Officer) Office Phone – (212) 813-2700 email – email@example.com
The firm will provide FINRA with the contact information for the two emergency contact persons: (1) name; (2) title; (3) mailing address; (4) email address; (5) telephone number; and (6) facsimile number through the FINRA Contact System (FCS).
David Hentschel, Chief Compliance Officer (CCO) will promptly notify FINRA of any change in this information through FCS (but no later than 30 days following the change) and will review, and if necessary update, this information within 17 business days after the end of each calendar year.
Rule: FINRA Rule 4370(f)
II. Firm Policy Our firm’s policy is to respond to a Significant Business Disruption (SBD) by safeguarding employees’ lives and firm property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all of the firm’s books and records, and allowing our customers to transact business. In the event that we determine we are unable to continue our business, we will assure customers prompt access to their funds and securities.
A. Significant Business Disruptions (SBDs) Our plan anticipates two kinds of SBDs, internal and external. Internal SBDs affect only our firm’s ability to communicate and do business, such as a fire in one of our buildings. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide-scale, regional disruption. Our response to an external SBD relies more heavily on other organizations and systems, especially on the capabilities of our clearing firms.
B. Approval and Execution Authority Robert Eide, a registered principal, is responsible for approving the plan. David Hentschel is responsible for conducting the required annual review. As an alternative, Antony Naccarelli also has the authority to execute the BCP.
C. Plan Location and Access Our firm will maintain copies of its BCP plan and the annual reviews, and the changes that have been made to it for inspection. An electronic copy of our plan is located on the Firm’s Main Mail Server in the Home Office listed as BCP and a hard copy in the Main office. Rule: FINRA Rule 4370(b), (d) and (e).
III. Business DescriptionOur firm conducts business in retail sales, institutional sales, investment banking, fee based business, fixed income, and derivative securities. Our firm is an introducing firm and does not perform any type of clearing function for itself or others. Furthermore, we do not hold customer funds or securities. We accept and enter orders. Retail customer transactions are primarily routed to our clearing firms, which executes these orders, compares them, allocates them, clears and settles them. Our clearing firms also maintain our customers’ accounts, can grant customers access to them, and deliver funds and securities. Our firm services retail and institutional customers and makes markets. Our Market Making Department and our Institutional Agency Sales Desk are located in our Home Office at 810 7th Avenue , New York, NY 10019.
Our clearing firms are: RBC Correspondent Services (RBC CS), a division of RBC Capital Markets LLC, Apex Clearing Corporation, and COR Clearing do not provide support for firms in the event of a BCP emergency. We do not have the infrastructure to take client calls etc. You can put up or link to our BCP statement that tests are conducted etc. But again, we do not take client calls.
IV. Office LocationsAegis currently has 25 office locations. Our employees may travel to these offices by means of foot, car, subway, train, bus, boat, plane, etc. The following is the contact information for each of the office locations;
V.Alternative Physical Location(s) of Employees In the event of an SBD, we will move our staff from affected offices to the closest office space available as we do not have a “back-up” facility. Rule: FINRA Rule 4370(c)(6).
VI. Customers’ Access to Funds and Securities Our firm does not maintain custody of customers’ funds or securities, which are maintained at our clearing firms, RBC CS, Apex Clearing Corporation, and COR Clearing. In the event of an internal or external SBD, if telephone service is available, our registered persons will take customer orders or instructions and contact our clearing firms on their behalf, and if our Web access is available, our firm will post on our Web site that customers may access their funds and securities by contacting RBC CS at (800)-949-0242, Apex Clearing Corporation (888) 268-6220, and COR Clearing (800) 811-3487. The firm will make this information available to customers through its disclosure policy. If SIPC determines that we are unable to meet our obligations to our customers or if our liabilities exceed our assets in violation of Securities Exchange Act Rule 15c3-1, SIPC may seek to appoint a trustee to disburse our assets to customers. We will assist SIPC and the trustee by providing our books and records identifying customer accounts subject to SIPC regulation. Rules: FINRA Rule 4370(a); Securities Exchange Act Rule 15c3-1;see also 15 U.S.C. § 78eee.
VII. Data Back-Up and Recovery (Hard Copy and Electronic)Our firm maintains its primary hard copy books and records in its office locations and certain electronic records with its clearing firms. David Hentschel, Chief Compliance Officer (212-813-1010), Antony Naccarelli (212) 813-1010, and Kevin McKenna (212) 813-1010 are responsible for the maintenance of these books and records. Our firm maintains the following document types and forms that are not transmitted to our clearing firms: Payroll and records relating to the firm’s internal accounting. Our firm maintains its back-up hard copy books and records in its Home Office. These records are hard copies and electronic files. David Hentschel is responsible for the maintenance of these back-up books and records. Our firm backs up its paper records by copying and storing them off-site. We back up our records on an ongoing basis. The firm backs up its electronic records regularly and keeps a copy at 810 7th Avenue, 18th floor, New York, NY 10019. In the event of an internal or external SBD that causes the loss of our paper records, we will physically recover them from our back-up site. If our primary site is inoperable, we will continue operations from our back-up site or an alternate location. For the loss of electronic records, we will either physically recover the storage media or electronically recover data from our back-up site, or, if our primary site is inoperable, continue operations from our back-up site or an alternate location. Rule: FINRA Rule 4370(c)(1).
VIII.Financial and Operational Assessments A. Operational Risk In the event of an SBD, we will immediately identify what means will permit us to communicate with our customers, employees, critical business constituents, critical banks, critical counter-parties, and regulators. Although the effects of an SBD will determine the means of alternative communication, the communications options we will employ will include telephone communications and e-mail transmittals. In addition, we will retrieve our key activity records as described in the section above, Data Back-Up and Recovery hard copy and electronic. Rules: FINRA Rules 4370(c)(3),(c)(4), (c)(5), (c)(7), (c)(9 & (g)(2)).
B. Financial and Credit RiskIn the event of an SBD, we will determine the value and liquidity of our investments and other assets to evaluate our ability to continue to fund our operations and remain in capital compliance. We will contact our clearing firms, critical banks, regulators and investors to apprise them of our financial status. If we determine that we may be unable to meet our obligations to those counter-parties or otherwise continue to fund our operations, we will request additional financing from our bank or other credit sources to fulfill our obligations to our customers and clients. If we cannot remedy a capital deficiency, we will file appropriate notices with our regulators and SIPC and immediately take appropriate steps and any measures required by our regulators. Rules: FINRA Rules 4370(c)(3), (c)(8) & (g)(2).
IX. Mission Critical Systems Our firm’s “mission critical systems” are those that ensure prompt and accurate processing of securities transactions, including order taking, entry, execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities. More specifically, these systems include: RBC’s AOM order entry system, RBC CS back office emulation, Apex Clearing Corporation, and COR Clearing. We have primary responsibility for establishing and maintaining our business relationships with our customers and have sole responsibility for our mission critical functions of order taking and routing those orders for execution. Our clearing firms provide, through contract, the execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities. Our clearing firm’s contract provides that our clearing firms will maintain a business continuity plan and the capacity to execute that plan. Our clearing firms represents that they will advise us of any material changes to its plan that might affect our ability to maintain our business. In the event our clearing firms execute their plan, they represent that they will notify us of such execution and provide us equal access to services as its other customers. If we reasonably determine that our clearing firms has not or cannot put their plan in place quickly enough to meet our needs, or is otherwise unable to provide access to such services, our clearing firms represents that it will assist us in seeking services from an alternative source. Our clearing firms represent that they backs up their records at a remote site. Our clearing firms represent that they operate back-up operating facilities in a geographically separate area with the capability to conduct the same volume of business as its primary site. Our clearing firms have also confirmed the effectiveness of their back-up arrangements to recover from a wide scale disruption by testing. Recovery-time objectives provide concrete goals for implementation. They are not, however, hard and fast deadlines that must be met in every emergency situation, and various external factors surrounding a disruption, such as time of day, scope of disruption, and status of critical infrastructure – particularly telecommunications – can affect actual recovery times. Recovery refers to the restoration of clearing and settlement activities after a wide-scale disruption; resumption refers to the capacity to accept and process new transactions and payments after a wide-scale disruption. Our clearing firms have the following SBD recovery time and resumption objectives: recovery time period of 3 hours; and resumption time within the same business day. Kevin McKenna will periodically review our clearing firm’s capabilities to perform the mission critical functions the clearing firms has contracted to perform for our firm.
A. Our Firm’s Mission Critical Systems
1. Order Taking Currently, our firm receives orders from customers via telephone, written communiqué with client signature, and in person visits by the customer. During an SBD, either internal or external, we will continue to take orders through any of these methods that are available and reliable, and in addition, as communications permit, we will inform our customers when communications become available to tell them what alternatives they have to send their orders to us. Customers will be informed of alternatives by telephone. If necessary, we will advise our customers to place liquidating orders only directly with our clearing firms at RBC CS at (800)-949-0242, Apex Clearing Corporation (888) 268-6220, and COR Clearing (800) 811-3487.
2.Order Entry Currently, our firm enters orders by recording them on paper or electronically and sending them to our clearing firms electronically or telephonically. In the event of an internal SBD, we will enter and send records to our clearing firms by the fastest alternative means available, which include email and overnight delivery. In the event of an external SBD, we will maintain orders in electronic or paper format, and deliver the order to the clearing firms by the fastest means available when it resumes operations. In addition, during an internal SBD, we may need to refer our customers to deal directly with our clearing firms for order entry.
3.Order ExecutionIn the event of an internal SBD, we would execute all customer orders in an agency capacity utilizing our clearing firms’ order management systems. In the event of an external SBD, we would access our clearing firms’ order management systems through the internet.
4.Other Services Currently Provided to Customers At this time Aegis provides no other services to its retail customers. Should this change, the appropriate changes to Aegis’ BCP will be made.
B. Mission Critical Systems Provided by Our Clearing Firm Our firm relies, by contract, on our clearing firms to provide order execution, order comparison, order allocation, and the maintenance of customer accounts, delivery of funds and securities, and access to customer accounts. Rules: FINRA Rules 3510(c)(2) & (g)(1).
X. Alternate Communications Between the Firm and Customers, Employees, and Regulators
A. CustomersWe now communicate with our customers using the telephone, e-mail, fax, mail, and in personal visits at our firm’s office location. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. For example, if we have communicated with a party by e-mail but the Internet is unavailable, we will contact them via telephone and follow up in writing where a written record is needed and will provide a mailed or faxed copy to the customer if necessary. Rule: FINRA Rule 4370(c)(4).
B. Employees We now communicate with our employees using the telephone, e-mail, and in person. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. We will also employ a call tree so that senior management can reach all employees quickly during an SBD. The call tree includes all staff home and office phone numbers. We have identified persons, noted below, who live near each other and may reach each other in person: The persons to invoke use of the call tree are: Robert Eide and George Kott. As noted above in section IV, each location maintains one primary contact person. In the event of an SBD at any one of the locations, the contact person will reach out to each of the employees that work at the locations and notify them of the appropriate procedures. Rule: FINRA Rule 4370(c)(5).
C. Regulators We are currently members of the following SROs: FINRA and MSRB. We communicate with our regulators using the telephone, e-mail, fax, U.S. mail, and in person. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. Rule: FINRA Rule 4370(c)(9).XI. Critical Business Constituents, Banks, and Counter-Parties
A. Business constituents We have contacted our critical business constituents (businesses with which we have an ongoing commercial relationship in support of our operating activities, such as vendors providing us critical services), and determined the extent to which we can continue our business relationship with them in light of the internal or external SBD. We will quickly establish alternative arrangements if a business constituent can no longer provide the needed goods or services when we need them because of a SBD to them or our firm. Our major suppliers are: RBC CS at (800)-949-0242 ,Apex Clearing Corporation (888) 268-6220, and COR Clearing (800) 811-3487 Rules: FINRA Rule 4370(c)(7).
B. Banks We have contacted our banks and lenders to determine if they can continue to provide the financing that we will need in light of the internal or external SBD. The bank maintaining our operating account is: First Republic, 320 Park Avenue New York, NY 10022. Our current contact is Nicole Parissi at (212)-259-3664. The clearing firms maintaining our Proprietary Account of Introducing Brokers/Dealers (PAIB account) are RBC CS, Apex Clearing Corporation, and COR Clearing. If our banks and other lenders are unable to provide the financing, we will seek alternative financing immediately from certain officers of Aegis Capital Corp. Rules: FINRA Rule 4370(c)(7).
C. Counter-Parties We have contacted our critical counter-parties, such as other broker-dealers or institutional customers, to determine if we will be able to carry out our transactions with them in light of the internal or external SBD. Where the transactions cannot be completed, we will work with our clearing firms or contact those counter-parties directly to make alternative arrangements to complete those transactions as soon as possible. Rules: FINRA Rule 4370(c)(7).
XII. Regulatory ReportingOur firm is subject to regulation by: Security Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), Municipal Securities Rulemaking Board (MSRB) and state securities regulators. We now file reports with our regulators using paper copies in the mail, and electronically using fax, e-mail, and the Internet. In the event of an SBD, we will check with the SEC, FINRA, MSRB and other regulators to determine which means of filing are still available to us, and use the means closest in speed and form (written or oral) to our previous filing method. In the event that we cannot contact our regulators, we will continue to file required reports using the communication means available to us. Rule: FINRA Rule 4370(c)(8).
XIII.Disclosure of Business Continuity Plan We provide in writing a BCP disclosure statement to customers at account opening. We also post the disclosure statement on our Web site and will mail it to customers upon request. Rule: FINRA Rule 4370(e).
XIV.Updates and Annual Review Our firm will update this plan whenever we have a material change to our operations, structure, business or location or to those of our clearing firms. In addition, our firm will review this BCP annually, to modify it for any changes in our operations, structure, business, or location or those of our clearing firms. Rule: FINRA Rule 4370(b). Attachment A to Aegis Capital Corp. Business Continuity Plan has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our business continuity plan.
Contacting Us – If after a significant business disruption you cannot contact us as you usually do at 212-813-1010, you should call our alternative number [firm emergency number] or go to our website at www.aegiscapcorp.com. If you cannot access us through either of those means, you should contact our clearing firms, RBC CS at (800)949-0242, Apex Clearing Corporation (888) 268-6220, and COR Clearing (800) 811-3487 for instructions on how they may provide prompt access to funds and securities, enter orders and process other trade-related, cash and security transfer transactions for our customers.
Our Business Continuity Plan – We plan to quickly recover and resume business operations after a significant business disruption and respond by safeguarding our employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing our customers to transact business. In short, our business continuity plan is designed to permit our firm to resume operations as quickly as possible, given the scope and severity of the significant business disruption. Our business continuity plan addresses: data backup and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counter-party impact; regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business. Our clearing firms, RBC CS, Apex Clearing and COR Clearing, back up our important records in a geographically separate area. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, we have been advised by our clearing firms that its objective is to restore its own operations and be able to complete existing transactions and accept new transactions and payments within the same business day. Your orders and requests for funds and securities could be delayed during this period.
Varying Disruptions – Significant business disruptions can vary in their scope, such as only our firm, a single building housing our firm, the business district where our firm is located, the city where we are located, or the whole region. Within each of these areas, the severity of the disruption can also vary from minimal to severe. In a disruption to only our firm or a building housing our firm, we will transfer our operations to a local site when needed and expect to recover and resume business within the same business day. In a disruption affecting our business district, city, or region, we will transfer our operations to a site outside of the affected area, and recover and resume business within the same business day. In either situation, we plan to continue in business, transfer operations to our clearing firms if necessary, and notify you through our website ww.aegiscapcorp.com or our customer emergency number 800-920-2502 how to contact us. If the significant business disruption is so severe that it prevents us from remaining in business, we will assure our customer’s prompt access to their funds and securities.
For more information – If you have questions about our business continuity planning, you can contact us at 212-813-1010.